FROM
THE 362ND DISTRICT COURT OF DENTON COUNTY TRIAL COURT NO.
15-10369-362

PANEL:
WALKER, MEIER, and GABRIEL, JJ.

OPINION

SUE
WALKER JUSTICE

I.
Introduction

Appellant
City of Denton perfected this interlocutory appeal from the
trial court's denial of the City's plea to the
jurisdiction and alternative motion for traditional summary
judgment.[1] Appellees Brian Rushing, Calvin Patterson,
and Kevin Marshall are nonexempt employees of the City
working in the Utilities Department. Appellees filed a
breach-of-a-unilateral-contract suit against the City to
recover on-call pay they claimed the City owed them under
Policy No. 106.06 of the City's Policies and Procedures
Manual for on-call periods they had worked. Because the
City's governmental immunity from Appellees' suit is
waived by Texas Local Government Code section 271.152, we
will affirm the trial court's denial of the City's
plea to the jurisdiction or alternative motion for
traditional summary judgment.

II.
Factual Background

The
following facts are undisputed. The City duly adopted a
policies and procedures manual.[2] The policies in the manual apply
to all regular full-time, regular part-time, temporary, and
seasonal employees who work for the City. See City
of Denton, Policies & Procedures Manual, Policy No.
7.00(I). Policy No. 106.06 contained in the City's
policies and procedure manual defines and establishes the
City's pay practices and administrative procedures for
response time and on-call duty. Id., Policy No.
106.06.[3] It provides that employees must respond
within thirty minutes while serving on call and "must
adhere to all City policies including the Anti-Substance
Abuse and Rehabilitation policy" while on call and
further provides that the failure to report any variance from
City policies while on call may result in forfeiture of
on-call pay and in disciplinary actions, including
termination. See id. Policy No. 106.06 also sets
forth the pay the City will provide employees for on-call
services and includes charts setting forth specific examples
of how on-call pay is calculated. Id. The terms of
the policy authorize department heads to require on-call
service from employees at their discretion based on the needs
of their department. Id.

Appellees
are regular, full-time, hourly-paid, non-exempt employees of
the City. All three Appellees worked week-long on-call
shifts[4] in addition to their normal work hours at
least one week per month each year between 2011 and 2015.
Appellee Patterson was disciplined when he was working an
on-call shift and failed to respond within the required
thirty-minute timeframe because his cell phone had died. The
City did not pay Appellees the on-call pay required by policy
106.06 for the on-call time Appellees had worked.

III.
Procedural Background

Appellees
filed suit against the City for breach of a unilateral
contract, alleging that a unilateral employment contract was
created when the City, as the Appellees' employer,
promised each of the Appellees in writing through its
ordinances and policies the "on-call pay" benefits
set forth in Policy No. 106.06 in exchange for each of the
Appellees' performance of on-call services for the City,
and each of the Appellees, as the City's employees,
performed the on-call services demanded of them by the City.
Appellees alleged the City breached this unilateral contract
by failing to pay for the on-call services Appellees had
provided and that their breach-of-unilateral-contract suit
against the City fell within section 271.152's waiver of
immunity. See Tex. Loc. Gov't Code Ann. §
271.152 (West 2016).

The
City filed a plea to the jurisdiction and alternative motion
for traditional summary judgment. Both asserted that section
271.152's waiver of immunity did not apply to
Appellees' suit for breach of a unilateral
contract.[5] The City asserted that its governmental
immunity was not waived and that the trial court lacked
jurisdiction. According to the City, section 271.152 did not
waive its immunity because no written contract existed, as
required under section 271.152, and because a disclaimer in
the City's policies and procedures manual evidenced the
lack of a contract.[6] After a hearing, the trial court denied
the City's plea to the jurisdiction and alternative
motion for traditional summary judgment.

The
City perfected this appeal and raises three issues asserting
that section 271.152 is inapplicable to Appellees' suit,
that the City was entitled to summary judgment as a matter of
law, and that the trial court lacks jurisdiction because the
City possesses immunity.[7]

IV.
Analysis

A.
Standard of Review

In
filing a plea to the jurisdiction, a litigant challenges the
trial court's subject-matter jurisdiction. Bland
Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex.
2000). Because subject-matter jurisdiction is a question of
law, we conduct a de novo review of the trial court's
ruling on the plea. Tex. Dep't of Parks &
Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004).
When a plea to the jurisdiction challenges the existence of
jurisdictional facts, like the City's plea to the
jurisdiction and motion for traditional summary judgment did,
the reviewing court considers relevant evidence submitted by
the parties when necessary to resolve the jurisdictional
issues raised. See id. If the evidence creates a
fact question regarding the jurisdictional issue, then the
plea to the jurisdiction must be denied. See id. at
227-28. But if the relevant evidence is undisputed or fails
to raise a fact question on the jurisdictional issue, then
the court rules on the plea to the jurisdiction as a matter
of law. Id. at 228. In ruling on a plea to the
jurisdiction, a court does not consider the merits of the
parties' claims. See id. at 226-28; Cty. of
Cameron v. Brown, 80 S.W.3d 549, 555 (Tex. 2002).

B.
The Law Concerning Waiver of Immunity by Section
271.152

The
waiver of immunity set forth in section 271.152 provides as
follows:

A local governmental entity that is authorized by statute or
the constitution to enter into a contract and that enters
into a contract subject to this subchapter waives sovereign
immunity to suit for the purpose of adjudicating a claim for
breach of contract, subject to the terms and conditions of
this subchapter.

Tex. Loc. Gov't Code Ann. § 271.152. For section
271.152's waiver of immunity to apply, three elements
must be established: (1) the party against whom the waiver is
asserted must be a "local governmental entity" as
defined by section 271.151(3); (2) the entity must be
authorized by statute or the constitution to enter into
contracts; and (3) the entity must in fact have entered into
a contract that is "subject to this subchapter, "
as defined by section 271.151(2). City ofHouston v. Williams, 353 S.W.3d 128, 134 (Tex.
2011).

Under
the third element, for a contract to be subject to section
271.152's waiver of immunity, it (1) must be in writing,
(2) state the essential terms of the agreement, (3) provide
for goods or services, (4) to the local governmental entity,
and (5) be executed on behalf of the local governmental
entity. Tex. Loc. Gov't. Code Ann. § 271.151(2)
(West 2016) (defining "contract subject to this
subchapter"); see also City of Houston, 353
S.W.3d at 135; Lubbock Cty. WaterControl &
Improvement Dist. v. Church & Akin, L.L.C., 442
S.W.3d 297, 302 (Tex. 2014) (recognizing that the principle
dispute in the appeal was whether the parties' contract
was a contract subject to subchapter 271 and holding that
"any written, authorized contract that states the
essential terms of an agreement for providing services to the
governmental entity triggers the waiver of immunity under
chapter 271).

C.
Application of the Law to the Present Facts

We
examine whether the three elements necessary for section
271.152's waiver of immunity to apply are present here.

1.
First Element-Defendant Is a Local Governmental
Entity

Concerning
the first element, the City is a home rule municipality,
chartered under the Constitution of the State of Texas.
See Tex. Loc. Gov't Code Ann. § 9.008(b)
(West 2008). The City is, and admits in its briefing that it
is, a municipality and hence a "local governmental
entity" as defined by section 271.151(3). See
id. § 271.151(3)(A); see also Tooke v. City of
Mexia, 197 S.W.3d 325, 345 (Tex. 2006) ("A local
governmental entity is defined to include a
municipality."). Thus, the first element necessary to
trigger section 271.152's waiver of immunity-that the
party against whom the waiver is asserted must be a
"local governmental entity" as defined by section
271.151(3)-was established.

2.
Second Element-Defendant Is Authorized to Enter into
Contracts

Concerning
the second element, the City concedes in its briefing that it
is authorized by statute or the constitution to enter into
contracts (although, as discussed below, the City asserts the
Texas constitution prohibited it from entering into this
particular contract). Thus, the second element necessary to
trigger section 271.152's waiver of immunity-that the
entity must be authorized by statute or the constitution to
enter into contracts-was established.

3.
Third Element-Defendant Entered into a Contract Subject to
this Subchapter as Defined in Section 271.151(2)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Concerning
the third element, the City must have entered into a contract
that is "subject to this subchapter" as defined by
section 271.151(2); and section 271.151(2) defines
"contract subject to this subchapter" as "a
written contract stating the essential terms of the agreement
for providing goods or services to the local governmental
entity that is properly executed on behalf of the local
governmental entity." Tex. Loc. Gov&#39;t Code Ann.
&sect; 271.151(2); see also City of Houston, 353
S.W.3d at 135 (breaking down the definition of "contract
subject to this subchapter" into five requisites). The
City argues that this third element is not met for numerous
reasons: because Policy No. 106.06 is not a contract; because
it does not contain all "essential terms of
Appellees' employment for services"; because it does
not contain "specified services or goods"; because
it was not properly executed; and because the City allegedly
had no authority to enter this particular contract, if it is
a ...

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